Kuwait, or officially known as The State of Kuwait, but is also referred to as the Emirate of Kuwait, due to the monarchy that has ruled Kuwait since 1752.

The Al-Sabah ruling family, is the Kuwaiti Royal family that's in Kuwait, and only family that can rule over Kuwait.

Despite one of their neighboring gulf state, the UAE, United Arab Emirates, is divided between seven different royal families, causing a power struggle between the seven royal families.

Kuwait was founded as a small fishing village in 1613, but in 1752, the ‏Sheikhs in Kuwait all autonomously voted the Al-Sabah to become the new rulers to lead Kuwait.
In doing so, the establishment of the Sheikhdom of Kuwait happened.

In 1871, the Sheikhdom of Kuwait became an Ottoman Empire vassal, until 1899, where they broke off from being a vassal, due to threats of annexation, later on, seeking protection by the British, and being granted protection, which made Sheikhdom of Kuwait a British Protectorate.

In 1961, Kuwait has officially became independent from the British Empire, in result, 

the Iraqi Republic declared Kuwait to be a lost Iraqi province, which caused Operation Vantage 1961 to start, resulting in Kuwaiti victory with British help.

This action marks the first Kuwait-Iraq conflict, which resulted into the gulf war in 1990.

Saddam Hussein had met with a US ambassador in Baghdad, where he stated that Kuwait are drilling way passed their oil borders and into Iraqi oil,

The US ambassador replied with, stating that the US does acknowledge that in fact, Kuwait is doing such thing, but won't interfere between Arab countries problems.

Saddam took that as a green light to plan the invasion against Kuwait. (But no evidence had ever been found or released to the public about this "illegal" oil drilling)

But 10 days before the invasion occurred, iran sent a warning to Kuwait about the invasion, in result, 

A high ranking politician in Kuwait heard about it, and decided to steal all military funding box, including government funds, in result,

Stealing over 666 million KWD, or 2.1 billion USD, or the equivalent of 4.86 billion USD today.

Due to lack of funds, the Kuwaiti military decided to do with what they have.

During the invasion, the Kuwaiti military had 20k well-trained soldiers, against over 150k Iraqi soldiers.

The Kuwaiti military only managed to hold up for 2 days, until the Iraqis managed to break through.

Later, the US only interfered due to the request from the Saudi Royal Family, from fears that Iraq might invade them next.

And the Gulf war happened, resulting in the liberation of Kuwait,

Then into the Iraq-American "liberation" war in 2003.

Despite the war, Kuwait has managed to recover quickly and economically, 

Making the Kuwaiti currency the world's most valuable currency.

Ps: I'm making this nation as much similar to Kuwait, or the same.